Federal Direct Stafford Loans
What is a Federal Direct Stafford Loan?
A federal loan awarded to all students who apply for financial aid and who are U.S. Citizens or permanent residents. The student must be enrolled at least half-time in a degree seeking program to be eligible for the Federal Direct Stafford Loan.
Subsidized vs. Unsubsidized Federal Direct Stafford Loans
If you are offered a subsidized loan, it means that the federal government pays the interest that accrues on your loan while you are enrolled at least half-time. After you graduate, withdraw, or cease to be enrolled at least half-time, you are responsible for the interest and must begin to make payments after a 6-month grace period.* Eligibility for the Direct Subsidized Stafford Loan is determined based on financial need.
*The recently enacted Congressional Appropriations Act of 2012 temporarily eliminated the government payment of interest on subsidized Stafford loans during the 6-month grace period provided to students when they are no longer enrolled at least half-time. This will affect loans that are first disbursed between July 1, 2012, and July 1, 2014.
If you are offered an unsubsidized loan, it means that you are responsible for the interest from the time the loan is disbursed. While you are enrolled at least half-time you may defer interest payments and capitalize the interest. Capitalization means that the interest is added to the loan balance, increasing the loan's size and cost. To reduce the total cost of your loan, consider making in-school interest only payments. If you would like to make in-school interest payments, please contact your loan servicer.
How much am I eligible to receive in Federal Direct Stafford Loans?
Based on academic level and federal dependency status, students may borrow up to the amounts listed in the table below on an annual basis. Please note Subsidized Stafford Loans are limited by your financial need and Unsubsidized Stafford Loans are limited by your cost of attendance less other aid received.
Note: Federal regulations require loan proration when the remainder of the student's program of study is less than an academic year. The maximum that can be borrowed is based on the number of units taken in the final semester in relation to the standard academic year (SAY). The SAY at LMU is 24 units. If you were graduating in the fall semester and enroll in 12 units, the maximum subsidized Stafford loan you can borrow would be $2,750 ($5,500 * 12 units/24units). If you decided to enroll ¾ time in 10 units, the maximum Stafford loan you could borrow would be $2,292 ($5,500 * 10 units/24 units).
Annual Undergraduate Federal Stafford Loan Limits
|
Base Amount |
Additional Unsubsidized Amount |
|
All Students |
Dependent Undergraduates (except students whose parents are denied PLUS loans) |
Independent Students and Dependent Students whose parents are denied PLUS loans |
|
1st Year Undergraduate
(0-29 Units) |
$3,500 |
$2,000 |
$6,000 |
|
2nd Year Undergraduate
(30-59 Units) |
$4,500 |
$2,000 |
$6,000 |
|
3rd Year+ Undergraduate
(60+ Units) |
$5,500 |
$2,000 |
$7,000 |
Aggregate Federal Loan Limits
Based on academic level and federal dependency status, students may borrow up to the amounts listed in the table below for their entire academic careers.
|
Dependency and Program of Study |
Subsidized Stafford |
Maximum Subsidized and
Unsubsidized Stafford |
|
Dependent Undergraduates |
$23,000 |
$31,000 |
|
Independent Undergraduates |
$23,000 |
$57,500 |
|
Graduate/Professional Students |
$65,500 |
$138,500 |
|
Certain Health Professional Students (MD, DDS, MHA, MPH) |
$65, 500 |
$224,000 |
What is the interest rate?
The interest rate on the Federal Stafford Loan is a fixed rate.
Undergraduate Subsidized Federal Stafford Loans
4.5 percent for loans first disbursed July 1, 2010 to June 30, 2011
3.4 percent for loans first disbursed July 1, 2011 to June 30, 2012
6.8 percent for loans first disbursed July 1, 2012 and after
Undergraduate Unsubsidized Federal Stafford Loans
6. 8 percent for all loans first disbursed after July 1, 2006
What are the fees?
Direct Stafford loans require a 1% origination fee. There's an up-front rebate of 0.5%, so the net disbursement is 99.5% of the gross loan amount. The borrower must make the first 12 payments on time to keep the rebate.
How will the loan funds be sent to the LMU?
Provided that you have completed the online Direct Loan Entrance Counseling session and the electronic Master Promissory Note (MPN), the loan will be sent in two disbursements; first disbursement (50%) in the fall semester and the second disbursement (50%) in the spring. These funds arrive via Electronic Fund Transfer (EFT) and are applied directly to your LMU student account.
When do I pay the loan back?
Repayment on this loan will begin after your grace period, 6 months after you graduate or cease to be enrolled at least half-time. You have 10 years to pay the loan back. Various repayment options are available and the loan period can be extended, if needed via consolidation. There is no prepayment penalty, so you can pay the loan earlier if you wish. Please contact your servicer if you would like to begin making payments prior to graduation.
How do I apply?
1)Complete the Free Application for Federal Student Aid (FAFSA)
2)Complete the LMU Undergraduate Financial Aid Application via MyAid
3)Review your Financial Aid Award when notified
4)Accept or decline the amount of Federal Direct Stafford Loan offered to you through PROWL via MyLMU
5)Complete a Federal Direct Stafford Loan Master Promissory Note
6)Complete Direct Loan Entrance Counseling
7)Enroll at least half-time per semester (6 units for most undergraduate programs)
Direct Subsidized and Unsubsidized Stafford Loan Disclosures